Wait. Canadians make more money than Americans? Yep.
So here's how I reconcile these numbers:
| USD** Median household income||50,050||71,300|
| USD GDP per capita (2011 nominal)||48,400||50,400|
|USD GDP per capita (2011 Purchasing-power-parity)||48,400||40,500|
| Gini Coefficient (CIA, 100 = most unequal)||45||32|
- Median household income is nearly 40 percent higher in Canada, even after adjusting for the number of people in the household.
- PPP GDP per capita is higher in the US by nearly 25 percent. This number, mind you, refers to total economic activity and cost of living, not income to individuals.
- These numbers are reconciled via inequality: Canada is more egalitarian (similar to Spain and Italy) than the US (similar to Bulgaria and Iran), circa 2005-2007. I reckon that inequality has recently worsened in the US.
Bottom Line: Canadians are well known for their higher levels of social harmony. This harmony may be due to a fairer distribution of income, but it's also accompanied by a higher average incomes.*** Americans are both poorer AND less equal than their neighbors.
* Average wages in 2011 are $42,000 in the US and $32,600 in Canada, but those numbers do not account for employment (66.7% and 71.5%, respectively) or the distribution of wages/capital gains. Right, Mitt?
** Gross income is not the same as income net of taxes, and total taxes are 27% of GDP in the US and 32% of GDP in Canada, but those rates ALSO do not take the distribution of the tax burden into account.
*** My definition of the American Dream -- "being able to do what you want" -- does not match common definitions that include upward mobility. That dream is -- relative to the past and relative to other countries -- more dream than reality [pdf].